What's happening
This bill reduces the stock transfer tax rebate from 100% to 80%, allocating resulting revenues between New York City and the state.
Why it matters
Reduces the 100% rebate on the stock transfer tax to 80%, meaning stock trades in New York would now effectively be taxed for the first time since the 1980s. This could increase the cost of buying and selling stock for investors, including pension funds and individuals, and may influence the financial industry’s operations in the state.
Allocates new tax revenue between New York City (25%) and the state’s general fund (75%),. creating a new stream of funding that could support city services and statewide programs, and potentially reducing pressure to raise other local or state taxes.
Represents a shift in long-standing tax policy, ending a decades-long full rebate that made New York highly attractive for stock transactions. This move could prompt debate about the competitiveness of New York’s financial markets and whether the new tax burden could push trading activity to other states or electronic venues.
May have broader economic and political impacts by addressing budget gaps or funding needs, but also risks opposition from Wall Street and financial sector stakeholders,. who may argue it could harm New York’s economy or reduce jobs and trading volume in the state.
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Who cares
Stock transfer taxpayers
The bill would reduce their rebate from 100% to 80% for taxable transactions occurring on or after October 1, 2018.
New York City fiscal officials
The city would receive 25% of the balance remaining after administrative costs, Municipal Assistance Corporation requirements and rebate funding, rather than the entire balance.
New York State budget officials
The bill would direct 75% of that remaining balance to the state treasury’s general fund for state purposes.
Department of Taxation and Finance
The department would administer the reduced rebate and the revised distribution of remaining stock transfer tax funds.
Headline styles
Reduce Stock Tax Rebates
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to investigations and government operations
- Referred to investigations and government operations
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
1528
2017-2018 Regular Sessions
IN SENATE
January 10, 2017
Introduced by Sen. AVELLA -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations
AN ACT to amend the tax law and the state finance law, in relation to the stock transfer tax
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision 1 of section 280-a of the tax law, as amended by chapter 578 of the laws of 1981, is amended to read as follows:
1. Except as otherwise provided in subdivision fifteen of this section, where a tax shall have been paid under this article a portion of the amount paid shall be allowed as a rebate and such portion shall be paid to the taxpayer but only to the extent that moneys are available for the payment of such rebates in the stock transfer incentive fund established pursuant to section ninety-two-i of the state finance law. The portion of the amount of tax paid which is to be allowed as a rebate shall be thirty percent of the tax incurred and paid on transactions subject to the stock transfer tax occurring on and after October first, nineteen hundred seventy-nine and on or before September thirtieth, nineteen hundred eighty and sixty percent of the tax incurred and paid on such transactions occurring on and after October first, nineteen hundred eighty and on or before September thirtieth, nineteen hundred eighty-one and all of the amount of tax incurred and paid shall be allowed as a rebate on transactions subject to the stock transfer tax occurring on and after October first, nineteen hundred eighty-one and on or before September thirtieth, two thousand eighteen, and eighty percent of the tax incurred and paid shall be allowed as a rebate on such transactions occurring on and after October first, two thousand eighteen.
§ 2. Subdivisions 3 and 4 of section 92-b of the state finance law, subdivision 3 as amended by chapter 878 of the laws of 1977 and subdivi-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00615-01-7
S. 1528 2
sion 4 as amended by chapter 724 of the laws of 1979, are amended to read as follows:
3. The moneys received from such tax and other sources in such fund, after deducting the amount the commissioner of taxation and finance shall determine to be necessary for reasonable costs of the state tax commission in administering, collecting and distributing such tax, commencing with the fiscal year ending March thirty-first, nineteen hundred seventy-seven, shall be appropriated to (i) the municipal assistance corporation for the city of New York created pursuant to title three of article ten of the public authorities law in order to enable such corporation to fulfill the terms of any agreements made with the holders of its notes and bonds and to carry out its corporate purposes including the maintenance of the capital reserve fund and (ii) to the extent such moneys are not required by such corporation as provided in subdivision seven of section ninety-two-d of this [chapter] article and, after deducting the amount such commissioner shall determine to be necessary for reasonable costs of the state tax commission in administering and making distributions in accordance with the provisions of section two hundred eighty-a of the tax law from the stock transfer incentive fund, to the stock transfer incentive fund created pursuant to section ninety-two-i of this [chapter] article to enable rebates to be made from such fund under the provisions of section two hundred eighty-a of the tax law and (iii) to the extent such moneys are not required by such fund, as certified by the commissioner of taxation and finance, twenty-five percent of the balance shall be appropriated to the city of New York, for the support of local government and seventy-five percent of the balance shall be paid into the general fund of the state treasury to the credit of the state purposes fund therein.
4. After the deduction of such costs of the state tax commission in administering, collecting and distributing such tax, the balances in the stock transfer tax fund so appropriated shall be distributed and paid on the last business day of September, December, March and June into the special account established for the municipal assistance corporation for the city of New York in the municipal assistance tax fund established pursuant to subdivision one of section ninety-two-d of this [chapter] article, unless and to the extent the balances in such fund on each such payment day are not required by such corporation as provided in said subdivision seven of said section ninety-two-d in which case the balance not so required, if any, after the deduction of such costs of the state tax commission in administering and making distributions in accordance with the provisions of section two hundred eighty-a of the tax law from the stock transfer incentive fund shall be distributed and paid to the stock transfer incentive fund in the custody of the commissioner of taxation and finance established pursuant to section ninety-two-i of this [chapter] article and unless and to the extent that the balances in the stock transfer tax fund on each such payment day are not required by the stock transfer incentive fund as provided in such section ninetytwo-i of this [chapter] article in which case twenty-five percent of the balance not so required, if any, shall be distributed and paid to the chief fiscal officer of the city of New York to be paid into the treasury of the city to the credit of the general fund [or paid by the commissioner of taxation and finance to such other account or fund as may be designated in writing by such chief fiscal officer at least ten business days prior to such last day and on each such day, the] and seventy-five percent of the balance not so required, shall be paid into the general fund of the state treasury to the credit of the state
S. 1528 3
purposes fund therein. The commissioner of taxation and finance shall certify to the comptroller the amount deducted for administering, collecting and distributing such tax during such quarterly period and shall pay such amount into the general fund of the state treasury to the credit of the state purposes fund therein. In no event shall any amount (other than the amount to be deducted for administering, collecting and distributing such tax) be distributed or paid from the stock transfer tax fund to any person other than the municipal assistance corporation for the city of New York unless and until the aggregate of all payments certified to the comptroller as required by such corporation in order to comply with its agreements with the holders of its notes and bonds and to carry out its corporate purposes, including the maintenance of the capital reserve fund, which remain unappropriated or unpaid to such corporation shall have been appropriated to such corporation and shall have been paid in full provided, however, that no person, including such corporation or the holders of its notes or bonds shall have any lien on such tax and such agreements shall be executory only to the extent of the balances available to the state in such fund. If the balances in such fund are not required by such corporation pursuant to the provisions of this subdivision, on each such last business day of September, December, March and June, the commissioner of taxation and finance shall certify to the comptroller the amount deducted for administering and making distributions in accordance with the provisions of section two hundred eighty-a of the tax law from the stock transfer incentive fund during such quarterly period and he shall pay such amount into the general fund of the state treasury to the credit of the state purposes fund therein. To the extent such moneys are not required by such corporation, as provided in subdivision seven of section ninetytwo-d of this [chapter] article, no amount thereof (other than such amount to be deducted for administering, collecting and distributing such tax and such costs in administering and making distributions in accordance with the provisions of section two hundred eighty-a of the tax law from the stock transfer incentive fund) shall be distributed or paid from the stock transfer tax fund other than to such stock transfer incentive fund in the custody of the commissioner of taxation and finance unless and until the aggregate of all payments certified to the comptroller by such commissioner pursuant to the provisions of such incentive fund as necessary to provide payments on account of rebates authorized pursuant to section two hundred eighty-a of the tax law which remain unappropriated or unpaid to such fund shall have been appropriated to such fund and shall have been paid in full provided, however, that no person, including any taxpayer under article twelve of the tax law or any member or dealer referred to in subdivisions two-a and six of section two hundred eighty-a of such law, shall have any lien on this fund or the stock transfer incentive fund.
§ 3. This act shall take effect September 1, 2018.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the tax law and the state finance law, in relation to the stock transfer tax
Purpose or general idea of bill
The purpose of this bill is to reduce the rebate of the stock transfer tax to 80% and provides for appropriation of the balance of such tax 25% to the city of New York and 75% to the state.
Summary of provisions
Section 1 amends subdivision 1 of section 280-a of the tax law, as amended by chapter 578 of the laws of 1981, by adding that on or before September 30th, 2016, 80% of the tax incurred and paid shall be allowed as a rebate on the stock transfer tax paid.
Section 2 amends subdivision 3 and 4 of section 92-b of the state finance law, subdivision 3 as amended by chapter 878 of the laws of 1977 and subdivision 4 as amended by chapter 724 of the laws of 1979, to appropriate 25% of the balance of the stock transfer tax to the city of New York and 75% of the balance of the stock transfer tax to the state
Section 3 provides for this act to take effect September 1, 2018.
Justification
New York faces a devastating budget deficit this year with a shortfall estimated at nearly $10 billion and growing. As a result, NYS will make dramatic cuts to schools, health care, energy and environmental programs and a drastic reduction in the state workforce. While spending cuts are necessary to address the severe budget shortfall and shared sacrifices are called for from all sectors of our communities, it is incumbent upon the legislature to look for ways to increase revenue in a responsible and legitimate way as well. Shared sacrifice must come in the form of not only budget cuts but revenue generating prospects as well.
A responsible approach to looking at potential revenue sources should necessarily involve reviewing current revenue sources that may not be utilized as efficiently as possible. One such existing source of revenue is the "Stock Transfer Tax" that imposes a small fee on the sale or transfer of stocks, bonds and other financial assets. The New York State "Stock Transfer Tax" has been in existence since 1915, and was used as a revenue source by the State for many years until it was slowly reduced by virtue of rebates. Since 1981 the tax has been rebated at a rate of 100%, therefore every year $16 billion in stock transfer taxes (at a nickel a share) is collected by the state and immediately returned to Wall Street. Rolling back a small proportion of the Stock Transfer Tax rebate on financial transactions to an 80%, as opposed to 100%, rebate will help to significantly address the deficit by raising a substantial amount of revenue. It will also continue to provide a substantial rebate of this tax to investors and is a fair and reasonable shared sacrifice.
Prior legislative history
2015-16. S.891 2013-14, S.729 2011-12, S.3892-A/A.7063-A (Barron)
Fiscal implications for state and local governments
None.
Effective date
This act shall take effect September 1, 2018.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.